This document defines different types of advertising agencies and discusses their roles, clients, revenue sources, and industry trends. It describes full-service agencies that handle all aspects of advertising and promotion for clients. It also discusses boutique agencies, media buyers, and in-house agencies. The document outlines the roles of key agency personnel like account executives, creative directors, and producers. It explains how agencies are paid through commissions, markups, and fees. Finally, it discusses industry consolidation and how new media is challenging legacy advertising models.

1. Ad Agencies

2. Today’s Objectives Define the main types of ad agencies Debate pros and cons of in-house agencies Explain what people do in ad agencies Describe industry changes Discuss clients and revenue Explain how suppliers and the media help

3. Organizations in Advertising Advertisers (Clients) Agencies Suppliers Media

4. Definition of an Ad Agency An independent organization of creative people and businesspeople who specialize in developing and preparing marketing and advertising plans, advertisements, and other promotional tools. Agencies also purchase advertising space and time in various media on behalf of different advertisers (clients) to find customers for their goods and services. - American Association of Advertising Agencies (AAAA)

5. Definition of an Ad Agency Agencyroles Develop marketing & ad plans Develop ads & promotions Purchase ad space and time

6. Reach Full-Service Consumer Business-to-Business (B2B) Specialty Boutiques Media Buyers Interactive Types of Ad Agencies Local National International Regional

8. Creative approach

9. Producing ads

10. Performing research

12. Public relations

13. Sales promotion materials

14. Annual reports

15. Trade-show exhibits

16. Interactive mediaSource: advertisingftw.tumblr.com Source: creativerge.com Source: ultraentertainment.com

17. General Consumer Full-Service Agency Focus on clients whose goods are purchased, used primarily by consumers. Example: McCann-Erickson (international agency, subsidiary of Interpublic Group, offices in more than 130 countries) Source: adpulp.com

18. One of McCann-Erickson’s biggest global clients, Coca-Cola (Ad from Belfast, Ireland) Source: hello.eboy.com

19. McCann-Erickson ad for Ferrari: Milan, Italy Source: adverbox.com

20. McCann-Erickson ad for U.S. Army, sponsor of 2009 National HALO 3 Championship Source: effie.org

21. Business-to-Business Agencies Source: dewysmfg.com Focus on clients whose goods are purchased, used primarily by businesses. Example: Proteus B2B Marketing headquartered in Grand Rapids, MI

22. An ad for Dow Chemical aimed at reaching businesses in the resin market Source: bostonbranding.com

23. Boutique Ad Agencies Creative Artists Agency (CAA), a Hollywood talent agency, created the Coca-Cola polar bears in 1993. Source: thecoca-colacompany.com http://www.youtube.com/watch?v=SfIbBNuORHU

24. Types of Ad Agencies Media buyers: purchase and package media time & space for clients (agencies & direct customers). Interactive agencies: specialize in internet, digital market. Source: clioawards.com https://www.prioritymail.com/simulator.asp

25. Accountmanagement Admin Trafficcontrol Research & account planning Creative concepts The People of Ad Agencies Media buying & planning Production Other services

26. Accountmanagement Research & account planning The People of Ad Agencies Account planning: A hybrid discipline that bridges the gap between traditional research, account management, and creative direction whereby agency people represent the view of the consumer in order to better define and plan the client's advertising program. Agency team that acts as liaison between clients & internal departments. Account executive: responsible both for managing all the agency's services for the benefit of the client and for representing the agency's point of view to the client.

27. Creative concepts The People of Ad Agencies Media buying & planning A creative director leads a team made up of a copywriter and an art director who determine the verbal and visual elements of an ad campaign. Media planning: The process that directs advertising messages to the right people in the right place (media) at the right time.

28. The People of Ad Agencies Production Production: The department in an advertising agency that is responsible for managing the steps that transform creative concepts into finished advertisements and collateral materials. Often work with suppliers to buy type, photos, illustrations, enlist broadcast directors, producers, etc. The traffic department coordinates all ad production to ensure client and media deadlines are met.

29. The People of Ad Agencies Other services Agencies might also offer other services, such as these sales promotion materials, to be used by Honda dealerships on-site.

30. A Case Study An oldie, but a goodie. Lowes-Lintas develops a television commercial in 1989 for the brand-new Acuvue disposable contact lens by Johnson & Johnson. http://www.aef.com/on_campus/classroom/educational_materials/1751 Source: tjoos.com

31. Guess Who…

32. Guess Who… Account Executive

33. Guess Who…

34. Guess Who… Researcher

35. Guess Who…

36. Guess Who… The Client

37. Guess Who…

38. Guess Who… Creative Director

39. Guess Who…

40. Guess Who… Producer of the commercial (supplier)

41. Guess Who…

42. Guess Who… Director of the commercial (supplier)

43. How ad agencies are paid Media commissions Agency buys ad at 15% discount: $85,000 Agency bills client full ad amount: $100,000 $15,000 difference is kept by the agency Full page print ad at rate-card price: $100,000

45. MarkupsMaterials cost $85,000 Agency bills for materials plus a 17.65% markup Agency bills $100,000 which is costs plus markup Agency buys materials for campaign

46. How ad agencies are paid Media commissions Markups Fees Fee / commission combination Straight-fee (retainer) method Incentive system

47. In-house ad agencies Pros Cons May save money Lower creative quality Allows tighter control Less experience and talent May permit greater attention to the brand Loss of objectivity

48. In-house ad agencies As good as an independent agency? You decide.

49. Referrals Presentations Soliciting for new business Community relations& networking Ad Agencies’ Clients How agencies reach & attract new clients

50. Suppliers Printers &related specialists Art studios &web designers Design and produce artwork for ads and web sites. Produce brochures, sales promotion kits, point-of-purchase displays, etc. Film & videohouses Researchcompanies Specialize in film, video production or both. Help agencies with consumer data to formulate campaigns.

51. Out-of-home Print Electronic Direct mail Digitalinteractive Media Other media

53. Influenced by globalization

54. Conglomerates cover the spectrum of specialties, media

55. The Big 4: Omnicom, Interpublic Group, WPP, Publicis